Pennsylvania Taxes Little Cigars

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Pennsylvania Taxes Little Cigars

By Hank Behar - 11/17/2009
NEW YORK -- In an attempt to raise $16 million in state revenues, Pennsylvania is considering taxing little cigars.

The state took 101 days to come up with a budget this year, longer than any other state. So it's no wonder lawmakers got a little desperate for funds and reached out -- to little cigars.

Specifically, they imposed a tax of eight cents on every little cigar, starting Nov. 1, 2009. Little cigars are defined as those weighing four pounds or less per 1,000 sticks, with natural tobacco wrapping, and only those that are in packages that can be stamped are initially subject to the tax. But on Jan. 4, 2010, the tax will be extended to include little cigars not stamped, with the tax to be collected by wholesalers from their retailer customers.

Cigarette smokers also felt the hand of the tax collector in their pockets. Cigarette taxes rose to the same level as the newly taxed little cigars: eight cents per cigarette, up from .0675 cents. That raises the tax on a pack of cigarettes from $1.35 per pack to $1.60, an increase of 18.5 percent, which is expected to bring $97 million into the state treasury.

All is not dire for Pennsylvania convenience stores, however. Regular cigars, chewing tobacco and other tobacco products remain untaxed, which enables Pennsylvania to retain its title as the only state in the nation that does not tax such products.

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